Carmakers fall as European shares pare gains

LONDON, Sept 17 (Reuters) - Falling sales in Europe dented carmakers and dragged European shares lower on Tuesday as investors took a back seat before a U.S. Federal Reserve policy meeting that could pare back economic stimulus.

Carmakers dropped 1 percent, the top falling sector, after the Association of European Carmakers said European car sales fell 4.9 percent last month.

German car parts and tyre maker Continental AG (Xetra: 543900 - news) shed 4.1 percent with traders citing news that major shareholder Schaeffler had placed shares in the group worth 950 million euros to cut debt.

The FTSEurofirst 300 fell 3.56 points, or 0.3 percent to 1,254.86, having hit five-year highs on Tuesday as investors cheered the withdrawal of perceived hawk Lawrence Summers from the race to lead Fed.

Focus falls on the Fed's two-day policy meeting starting on Tuesday, when it is expected to begin scaling back stimulus by reducing its monthly asset purchases by $10 billion, according to a recent Reuters poll of economists.

"The selling pressure remains weak. We're not in a situation where people start to cut their positions, so all the pull-backs are buying opportunities," Aurel BGC analyst Gerard Sagnier said.

Fund managers appear sanguine about the outcome of the Fed meeting. Demand for "put options" on the Euro STOXX 50 (Zurich: ^STOXX50E - news) , used by managers to protect their portfolios against potential pull-backs, has been fading before September derivative contracts expire on Friday.